Investors Buy Homes at a Record Pace
Investors accounted for 9.86% of mortgages used to buy homes during the first four months of this year, according to LoanPerformance, which tracks 46 million mortgages monthly. That share compares to 8.67% last year and less than 6% in 2001. The share of mortgages used to buy second homes climbed to 7.19% through the end of April, up from 6.05% in 2004 and 2.18% in 2001, LoanPerformance reported. Redding, Calif. led the country in the investor share of home purchases at 23.71%. The remaining top 10 investor markets were: Medford-Ashland, Ore., 22.96%; Pocatello, Idaho, 21.43%; Visalia-Tulare-Porterville, Calif., 21.06%; Punta Gorda, Fla., 20.35%; Fresno, Calif., 19.81%; Tallahassee, Fla., 19.61%; Panama City, Fla., 19.12%; Bakersfield, Calif., 18.88%; and Flagstaff, Ariz., 18.74%. (www.realestatejournal.com)
RealEstateJournal.com (6/30/05); Ruth Simon, Wall Street Journal
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Snakes May Lurk Under the U.S. Property Ladder
Economy.com estimates that about one-third of the 2.6 million jobs that have been created over the past four years have been in housing-related sectors, including jobs in residential construction, furniture and DIY stores, and mortgage finance. The number of real estate agents in the U.S. has jumped by 45% over that period to 1.1 million. More joined the profession last year than at any time since records began in 1975. Some economists are concerned that many of these jobs will disappear when housing sales slow down. Between 1989 and 1991, as home sales declined, almost 60,000 of the nation’s 820,000 real estate agents closed shop, and the profession remained in decline until 1997. Of an estimated 3.16 million jobs in residential construction and specialty trade contracting, NAHB economist Michael Carliner says employment could decline by about 300,000 if the market cools. However, this could be offset by continued demand for home remodeling services, he said. “If you call up a builder to do work on your home, many may be too busy to call you back,” he said. “There is a lot of pent-up demand that will cushion the sector if home building slows.” (www.ft.com)
London Financial Times (7/1/05); Christopher Swann
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Eminent Domain This! Justice’s Farm Is Target
In what appeared to be a tongue-in-cheek reaction to a recent Supreme Court decision allowing the city of New London, Conn. to take property through eminent domain for a hotel and convention center, Logan Darrow Clements, CEO of Los-Angeles based Freestar Media, faxed a letter to officials in Weare, N.H., proposing to take over Justice David Souter’s two-story colonial farmhouse and turn it into a hotel. “The justification for such an eminent domain action is that our hotel will better serve the public interest as it will bring in economic development and higher tax revenue to Weare,” Clements wrote. Charles Meany, Weare’s code enforcement officer, said that in light of the Supreme Court decision, he is taking the message seriously. “I would imagine that some people are pretty much upset,” said Meany. “If it is their right to pursue this type of end, then by all means let the process begin.” Souter, a longtime Weare resident, joined in the 5-4 decision allowing governments to seize private property from one owner and turn it over to another if it would benefit the community. Arkansas, Florida, Illinois, Kentucky, Maine, Montana, South Carolina and Washington forbid the use of eminent domain for economic development unless it is to eliminate blight. (www.msnbc.com)
MSNBC.com (6/29/05); Associated Press
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Supreme Court Ruling May Threaten Fan Pier Plans
Following a recent Supreme Court decision strengthening the eminent domain powers of cities, Boston City Council President Michael Flaherty has proposed taking control of a 21-acre waterfront parcel owned by the Chicago-based Pritzker family. The family has spent four years lining up permits for three million square feet of mixed-use development on the site, but has had difficulty getting the project started. Under city zoning regulations, parking approvals can be reviewed if a projects is not started within three years. The Pritzker’s three-year period expires in November; without those approvals, they would have to spend millions of dollars more than they have already spent and it would take several more years to get new permits to build on the land. Existing permits are for the development of residences and office, retail and hotel space, along with the creation of a new Institute of Contemporary Art and other cultural and civic space. Two preliminary deals for the property by national home builder Lennar Corp. and Boston developer Stephen R. Karp fell through earlier this year. (www.globest.com)
GlobeSt.com (6/28/05); Beverly Ford
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Runoff Technology Sounds Good to Environmentalists, Developer
The Widewater development in Bangor, Maine is the first new residential site in the state to use bioretention cells, or rain gardens. The system is being used to handle runoff from parking lots into a nearby environmentally sensitive marsh area. Runoff can be full of pollutants, including road salt, motor oil, sand and heavy metals. Underground filtration would have been difficult because of the state’s very heavy, rocky clay soil. The cells are shallow depressions in the parking lot filled with an 18-inch layer of topsoil over a coarser rock with pipes in it. The pipes connect into catch basins and drain out the water that’s leaked or seeped through the topsoil into a detention pond. The pollutants are absorbed by grass and other plants growing in the topsoil, so there’s no danger to the watershed from the pond water. The grass that has absorbed the bad nutrients will be cut every spring, so it can regrow and start the process over again. The only drawback from the innovative system to developers is that it will take away some parking spaces, but overall the pros far outweighed the cons. (www.bangornews.com)
Bangor News (6/13/05); Emily Burnham
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Solar Thermal Building Product Demonstrates Energy Savings of 48 Percent
In a recently completed pilot study by scientists at the Alberta Research Council in Edmonton, Canada a combination of direct solar collection and heat storage technology with existing structural insulated panel system (SIPS) technology was found to reduce consumption for space heating by 48%. The thermal solar panels were embedded in exterior walls to create a more energy-efficient building envelope in the test module. The savings in energy consumption were measured against a test module representing a standard home with walls made of 2x6-inch wood studs with R-20 insulation. Another module using SIPS technology with walls made of 6-inch PlastiSpan Expanded Polystyrene (EPS) insulation cores between two oriented strand board panels attained a 25% savings on energy. The study focused on measuring energy consumption during a peak energy load period from Feb. 1 to May 15. On average, 65% of Canadian home energy consumption goes to heating space. Another 20% goes to hot water generation, and 15% for electricity. (www.sciencedaily.com)
Science Daily (6/3/05)
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Cozy Kitchens When the Space Is Small, Cooks Get Big Ideas on How to Cope
Typical of many owners of urban rowhouses and older houses, over the 11 years they have lived in their 1911 house in Baltimore, retired caterer Nick Sheridan, wife Suzanne Shaw and daughter Megan Sheridan have had to make the best of a 99-square-foot space with no pantry and little counter space. When together in the small kitchen, the three cooks are able to companionably chop vegetables for a stir-fry while only occasionally getting in each other’s way. The average kitchen in a new home was 285 square feet in 2003, compared with 250 a decade earlier, according to NAHB. “A lot of people want to open their kitchen out to an outdoor space or a terrace or something,” said David Gleason, president of a Baltimore architectural firm that has worked with clients with small galley kitchens. “They may take walls out and create kitchen and dining space and open back up to the yard. It helps to relieve the space of the darkness.” For those who don’t have the space or the money to open up the kitchen, Gleason says that it can still be made more workable by using a range with a downdraft system so a range hood can be replaced by more cabinet space. Light wood and a light polished granite countertop will make the space appear bigger and brighter, he says. (www.baltimoresun.com)
Baltimore Sun (6/29/05); Kate Shatzkin
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Blueprint/Phoenix
Retail is following rooftops in Phoenix, which was the nation’s hottest new-home market last year, adding residents at a rate nearly three times the U.S. average. Phoenix’s vacancy rate for retail space was at an all-time low of 5.9% in this year’s first quarter, even though 4.7 million square feet of storefront space were completed in 2004, according to Property and Portfolio Research in Boston. According to the research firm, many new residents are coming from California, attracted by the abundant sunshine and relatively low living costs. Median home prices remain below $200,000. Population growth in the area continues to outpace the nation, with a net 57,900 people moving in last year, for an increase of 2.5%. The area picked up 65,700 new jobs in the year ending this March, a 4% rise, and the construction sector showed the strongest employment gains. The Phoenix metropolitan area is the 14th largest in the nation. (www.wsj.com)
Wall Street Journal (6/29/05); Nancy D. Holt
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